"The slump in home prices was both deeper and more widespread than ever in the fourth quarter, according to a trade group report Thursday.
"Prices slumped 2.7 percent in the fourth quarter compared to the fourth quarter of a year earlier, according to the report from the National Association of Realtors. That's the biggest year-over-year drop on record, and follows a 1.0 percent year-over-year decline in the third quarter.
"In addition, 73 metropolitan areas reported a decline in the fourth quarter, compared to a year earlier. That outpaced the 71 that saw a gain. It was both a record number and percentage of markets showing a decline in the group's quarterly report. Five markets saw prices unchanged." CNN February 15, 2007
More importantly:
"Concerns over risky US mortgage lending mounted yesterday as a key indicator of credit problems hovered at record levels, another small mortgage lender failed and a big homebuilder admitted borrowers' difficulties could damage its business.
"Investor worries over loans made to US borrowers with weak credit histories have grown since housing market activity slumped last year. They were thrown into sharper relief last week when HSBC and New Century warned they had underestimated the spike in defaults on so-called sub-prime mortgages.
A credit derivative index tracking credit risk on sub-prime mortgage bonds has soared to a record high this week. The ABX index, based on bonds rated BBB-, has traded at levels approaching 1,000 basis points- up from 650bp a week ago and about 250bp last autumn." Financial Times, February 14, 2007
And the jobless rates are at an all time low? Not so fast:
"The US manufacturing sector contracted unexpectedly this month as factory activity fell to its slowest pace in nearly three years, according to a fresh survey.
"The Institute for Supply Management said its manufacturing index fell into negative territory in January as it slipped below the 50 mark to 49.3.
"The poor performance underlined economists' fears that the sector could be sliding into recession." Financial Times February 1, 2007
Companies are announcing layoffs by the thousands:
"DaimlerChrysler is leaving all options on the table for its unprofitable Chrysler unit, the German-American carmaker said on Wednesday. DaimlerChrysler is expected to announce the closure of US plants and elimination of at least 10,000 jobs later on Wednesday, when the company makes its annual results announcement in Detroit for the first time later on Wednesday." Financial Times, February 14, 2007
"Hershey, the largest US chocolate maker, is to cut over 10 per cent of its workers in a reorganization of its manufacturing that will include building a new factory in Mexico.
"The company said it expected to cut about 1,500 jobs over the next three years from its current workforce of more than 13,000. It will also reduce the number of manufacturing lines it operates by almost a third as it seeks to reduce costs.
"The restructuring is expected to cost $575m but deliver annual savings that will rise to between $170 and $190 by 2010, the company said." Financial Times February 16, 2007
"A cloud of uncertainty among the world's phone companies left Alcatel-Lucent with a bruising net loss Friday in its first quarterly report as the world's largest telecommunications equipment maker, and the company moved to eliminate thousands more jobs.
"Prices slumped 2.7 percent in the fourth quarter compared to the fourth quarter of a year earlier, according to the report from the National Association of Realtors. That's the biggest year-over-year drop on record, and follows a 1.0 percent year-over-year decline in the third quarter.
"In addition, 73 metropolitan areas reported a decline in the fourth quarter, compared to a year earlier. That outpaced the 71 that saw a gain. It was both a record number and percentage of markets showing a decline in the group's quarterly report. Five markets saw prices unchanged." CNN February 15, 2007
More importantly:
"Investor worries over loans made to US borrowers with weak credit histories have grown since housing market activity slumped last year. They were thrown into sharper relief last week when HSBC and New Century warned they had underestimated the spike in defaults on so-called sub-prime mortgages.
A credit derivative index tracking credit risk on sub-prime mortgage bonds has soared to a record high this week. The ABX index, based on bonds rated BBB-, has traded at levels approaching 1,000 basis points- up from 650bp a week ago and about 250bp last autumn." Financial Times, February 14, 2007
And the jobless rates are at an all time low? Not so fast:
"The US manufacturing sector contracted unexpectedly this month as factory activity fell to its slowest pace in nearly three years, according to a fresh survey.
"The Institute for Supply Management said its manufacturing index fell into negative territory in January as it slipped below the 50 mark to 49.3.
"The poor performance underlined economists' fears that the sector could be sliding into recession." Financial Times February 1, 2007
Companies are announcing layoffs by the thousands:
"DaimlerChrysler is leaving all options on the table for its unprofitable Chrysler unit, the German-American carmaker said on Wednesday. DaimlerChrysler is expected to announce the closure of US plants and elimination of at least 10,000 jobs later on Wednesday, when the company makes its annual results announcement in Detroit for the first time later on Wednesday." Financial Times, February 14, 2007
"Hershey, the largest US chocolate maker, is to cut over 10 per cent of its workers in a reorganization of its manufacturing that will include building a new factory in Mexico.
"The company said it expected to cut about 1,500 jobs over the next three years from its current workforce of more than 13,000. It will also reduce the number of manufacturing lines it operates by almost a third as it seeks to reduce costs.
"The restructuring is expected to cost $575m but deliver annual savings that will rise to between $170 and $190 by 2010, the company said." Financial Times February 16, 2007
"A cloud of uncertainty among the world's phone companies left Alcatel-Lucent with a bruising net loss Friday in its first quarterly report as the world's largest telecommunications equipment maker, and the company moved to eliminate thousands more jobs.
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